Journalists Roundtable

Local journalists review the week’s top stories.

Transcript:

Ted Simons:
Hello, and welcome to "Horizon." I'm Ted Simons. Joining me tonight, Mary Jo Pitzl of "The Arizona Republic," Daniel Scarpinato of "The Arizona Daily Star," and Mary K. Reinhart of "The Arizona Guardian." Borrowing money to pay next month's bills; that's what the state is facing. We're going to get to that. But Mary K., you wrote about agency heads coming in and looking at options, if the state -- what? -- starts to cut certain incremental points of the budget. Talk to us.

Mary K. Reinhart:
The budget director, Eileen Klein asked the agency directors to come back with 5%, 10%, 15%, 20% budget cuts. What would happen if? How would this affect -- any ways to mitigate this? Any laws that would be affected? And they came back with four volumes, unfortunately, not on electronic database, although the D.E.S. information is, and outlining some deep catastrophic cuts. Once you get to the 20%, to the -- don't pretend that the department of economic security -- we're simply a bare bones protection for children outfit at 15%, we can't pretend to be accomplishing our mission.

Ted Simons:
And this includes everything from AHCCCS to licenses to inspections to the universities, the whole nine yards.

Mary K. Reinhart:
To prisons and juvenile corrections and deep cuts would close the juvenile lockdown. Statewide, every agency, except the elected officials and it's an exercise, the governor's office made clear, it's an exercise. Throwing it out there to mange sure that everybody understands what the cuts would entail.

Mary Jo Pitzl:
I think it's an interesting exercise. As we saw with the cuts in late January, as those cuts started to trickle out, lawmakers said we kiss agree with that and think they're doing a Washington monument on us. With these different scenarios in hand, if I'm a lawmaker, I would be reading those. You can't claim you're surprised if they wind up having to cut. Because these are what the agency directors say have to be put.

Daniel Scarpinato:
I think people when they look at these, need to understand the politics and here you have a governor who declared you can't do all of this through cuts. And I think part of this is giving -- maybe some political cover to say, here's what it means if you actually were to cut $3 billion from the budget.

Ted Simons:
What kind of reaction from lawmakers regarding these options?

Mary K. Reinhart:
Some of the reaction from the advocates and providers ok. We realize we're not going to get to 20%, that's probably -- maybe not even 15%. But if we're going to look at a $3 billion budget deficit and take equal parts budget cuts, borrowing and stimulus, you got to get to a billion. There's got to be something. Between zero and 20 is the number. This eliminates the political cover.

Ted Simons:
You got hit once, now we're showing you what could happen next. No reason to hew and cry anymore. As far as the budget, are we looking at mid April possibly?

Mary Jo Pitzl:
In a meeting, John Kavanagh said they would hope to have a budget by mid April. I haven't seen anyone who hasn't jumped on that bandwagon. It's happened before that they did get budgets done in that time frame. But this one has different dynamics; they've got a governor trying to get their attention on to her agenda. Mid April seems unlikely, but on the other hand, they're not doing anything else out there except budget work.

Ted Simons:
Is this likely at all, mid April?

Daniel Scarpinato:
I would be shocked if there was a budget mid April. It doesn't seem like there's much agreement. We have all of these ideas about a tax increase, about where the cuts are -- we just found out where the agencies might actually cut. I would be surprised and I think part of this might be that everybody is going to kind of wait it out and see who caves in first.

Mary Jo Pitzl:
I think the scenario Mary K. was describing, that's just the -- pretty soon, the governor will come out and build her plan. The appropriations chairman will see the legislative draft budget, option options budget. Russell Pearce says maybe by the end of this month. And the reason we're challenged by senate president Bob Burns, how can you balance a budget other than how we're doing it. And the work is due by the end of this month. We're going to have a lot of different ideas floating out there on the budget.

Daniel Scarpinato:
Are you going to let the public weigh in on the budget? First we need some parameters of what people are willing to agree to and then potentially as they've promised, you're going to have an opportunity for the public to come out and maybe, you know, give some reaction to it.

Mary K. Reinhart:
I think in the next few weeks, we'll see more numbers. As Mary Jo said, a legislative budget, perhaps next week for the rank and file. And the following week to the public. So we'll have something to work with. April 15th, when, you know, what's left of my 401(k) on that. [Laughter]

Ted Simons:
Speaking of money. The treasurer comes out and this is something we've heard before. The state is running out of money. So much so that we've got loan commission agreements which is something we haven't necessarily had in the past.

Mary Jo Pitzl:
It's déjà vu all over again. Dean Martin came out this week and said we're down to it, folks. Out of almost all of the money. If on Wednesday, had not used the last installment of rainy day money, he said the state could have not met its obligation that day. Without that infusion, they would have been broke. So he said we've got to get our house in order and do short term borrowing and the next day he had a meeting with a well known loan commission and because the last time they met, it was Martin, then-governor Napolitano, and there were wonderful, departing fireworks between Martin and Napolitano.

Daniel Scarpinato:
Basically Jerry Springer meets the state capitol. It was a weird reality show. The best way to destroy it is overdraft protection. Similar to protect your own bank account. The state is going to run out of money and we're going to go into the red and this allows us to cover our expenses and as soon as the money comes back in through stimulus or sales taxes or whatever, almost immediately pay it back with interest and the interest -- I don't know what the percentage will end up being, but end up -- may end up being half a million dollars on what they actually borrow.

Ted Simons:
These are short-term loans. How short the term?

Mary Jo Pitzl:
Because of flow of money, it could be as short as an overnight loan.

Ted Simons:
Get it in the morning and pay it the next day.

Mary Jo Pitzl:
If that last loan committee meeting was like Jerry Springer, than this one was like Horizon. [Laughter]

Ted Simons:
I'm sorry I missed the meeting. I would have enjoyed it. Let's talk about that real quickly. The relationship between the governor and the state treasurer, obviously, it's a different relationship with this governor, but when the treasurer says we're running out of money, is this governor now taking that more to heart? The previous governor said it's a moving target. You can't say that because you don't know the future revenues.

Daniel Scarpinato:
She's been going all over the state saying wake up. Everybody is in denial. This is bad. I think that she sees this as a last resort, but understands the dynamics here. Not that governor Napolitano did not, but there were other issues involved there.

Mary K. Reinhart:
I think governor Napolitano did say it's not that bad. We can get through it. It's a short-term problem and Governor Brewer is saying, no, it's really that bad. This is an opportunity for her to put an exclamation point on that.

Mary Jo Pitzl:
We should note that when Napolitano pushed back and said we don't need to set that interest rate right now. She was right. Martin estimates they'll need to borrow to get through payments that are due April 15th. Score one for her, and one for the treasurer, but we're a lot closer to that date and Governor Brewer was on board with this.

Ted Simons:
And you talked about the governor going around all over the place saying this is real. You got to get used to this. And saying that some lawmakers are in denial over the idea of the necessity of some kind of revenue enhancement, i.e., tax. And the response, you're not facing reality.

Daniel Scarpinato:
She's been saying this since before she took office. But the rhetoric has picked up. Lawmakers don't think they're in denial. Democrats think you can solve this their way which relies a lot on borrowing and other mechanisms and Republicans are pulling up some things that they panned a few months ago but now suddenly think they look better than a tax increase. When you listen to Governor Brewer, you get the sense that she's actually very passionate about particular issues and she views very strong language about what are you going do? Are you going to slash and burn the universities? Shut down K-12? She's really, I think, trying to put the ball in their court. And trying to, you know, get -- give people the idea they need to wake up and take this seriously.

Ted Simons:
The status of a tax hike? Any kind of tax increase, where is this right now? Obviously no go at the legislature, but -- where are we?

Mary K. Reinhart:
From 10 minutes after she delivered her speech. I think now the governor is beginning to see this is not going to come in time. We're not going to get it on the ballot, the legislature, not any likelihood of a spring vote. Perhaps something might materialize where they get a budget through and petition signatures have gathered after the fact and then in the fall voters vote to sort of restore funding to some of these things.

Ted Simons:
It should is dynamic, isn't it? That would be an interesting thing for voters so say. It's either this or that. We're decided one way or the other.

Daniel Scarpinato:
And the thing to remember is that this is a problem that extends beyond this year. And even if and when the economy recovers, we're still going to be back below revenues from 2007. So to get back to a point where we're even at the baseline of where we thought we'd be is going to be a while away. Her point, even if you do a tax increase or vote on a tax increase that can affect this cycle, we still have to worry about '11 and '12.

Mary Jo Pitzl:
I think the budget cutting scenarios that the agencies are doing plays into the case Brewer is trying to build. You want to know what government is going to look like, if we do this through cuts only, here's a glimpse.

Mary K. Reinhart:
She said she won't sign a budget that cuts into programs too heavily. Clearly, as Mary Jo said, this is a way to outline what those cuts will do.

Daniel Scarpinato:
It talks about how Republicans are now embracing some old Napolitano ideas. Remember how everyone mocked the stimulus package and now relying on stimulus money to do this. Everybody was looking for a magical pot of money. There was all of this waste in government they were going to eliminate but nobody's been able to point to it. And when the cuts came down from the agencies as Mary Jo points out, nobody was happy with them. I think maybe there's been a shift in realizing what exactly you can do and where the state's money is going.

Ted Simons:
Let's take this back to what we talked about earlier. The relationship between the governor and lawmakers. Is this as well causing for bigger fractures?

Mary K. Reinhart:
Potentially. I think one of the -- I think speaker Adams after the governor's speech that said three out of four ain't bad --

Mary Jo Pitzl:
Four out of five.

Mary K. Reinhart:
Excuse me. Clearly trying, they know who the big vote is. Fixing -- carries a lot of weight, I don't think they're in a position to alienate. If she's got to sign what they produce. Certainly not sending signals that they're willing to discuss a tax primary tax increase.

Mary Jo Pitzl:
The pushback is coming from the leadership and more conservative elements of her party. But even the Republicans who defended the governor are not very vocal. They're not out there with bricks and bats and throwing stones but they're also not saying too much. The governor has a long path to watch but she's staked out the middle pretty clearly in this whole fiscal debate and the test remains who is she going to pull into the middle.

Ted Simons:
The request for stimulus money happens a couple of weeks ago, and yet it seems like the story broke this week. What happened?

Mary K. Reinhart:
I don't know what happened. The governor's spokesman is buried with things on his desk. The letter is dated March 5th. I asked and received -- I heard it had been sent the middle of last week. We were caught up in the childcare funding issue and at the beginning of this week, I requested it and there it was. A two-page letter. At last I checked on the federalrecovery.gov website I don't know what the delay was, the money is there she's requested the money, she's done the pro-forma letter and so off we go.

Daniel Scarpinato:
The letter wasn't sent out and we think that everybody is going to tell us everything they're doing at every moment but she's been quite clear she was going to take the money. Multiple times in her speech. I don't think there's any surprise -- the bigger question is why wasn't it announced politically, it would have spared her from being criticized by Democrats.

Mary Jo Pitzl:
They had like a doomsday clock. How much time she had and it's a simple letter. So frankly, you could wait until the 11th hour and zip one off.

Mary K. Reinhart:
If you look at the websites that other states have set up. It's full of governor announces this and announces this. There's a lot of political hay to be made.

Ted Simons:
The loyal opposition is being --

Mary K. Reinhart:
Fiscal plain.

Ted Simons:
Exactly. Another thing I'm confused about. The teacher contracts. Notifying teachers that they'll not be renewed. This is something relatively basically down at the capital in terms of politics but this thing seemed to be awfully testy. Why was this so exciting all of a sudden? This issue?

Mary K. Reinhart:
It came out of nowhere. And was fast tracked by the leadership. Representative -- education chairman rich Crandall, heard that they needed the extra two months while the legislature wrestled with the budget so they didn't have to unnecessarily send out hundreds, thousands of pink slips. Democrats realized quickly they needed an emergency clause to make it work. For the first time this session and in some time, they had -- since the governor left, they had a hand to play and they played it clearly and effectively killed the bill in both houses by not giving it an emergency clause.

Ted Simons:
Was this a chance to be extra partisan?

Daniel Scarpinato:
It became political theater. But bottom line, the teachers are still getting the short end of the stick. Teachers still don't know if they're going to have a job no matter what changed. The whole debate became about this date. Either way, we don't have a budget, don't know what school districts are going to do and teachers don't know if they're going to have a job.

Mary Jo Pitzl:
If there's a debate, I think it went more to who is going to get the political short end. The fear of the Republicans, if these pink slips go out, they're going to be sending us emails and blaming us. And the Democrats say if we delay that, there won't be enough time for the protests to be heard before a budget is crafted. Watching this from afar, this was more like who can we stick with the short end politically.

Mary K. Reinhart:
The teachers' union, the Democrats said they were standing up for teachers. And the teachers said if we're not going to have a job, don't keep us twisting in the wind for two more months. It looks like they're going to get the pink slips and have that certainty. And at the end of the day, many asked to return to their jobs.

Daniel Scarpinato:
They still don't have certainty. The teachers will get the pink slip knows they may not actually lose their jobs. So the whole thing is awfully confusing. And I don't think anyone's life would be changed either way.

Ted Simons:
Senator Linda Gray's life was changed this week. By way of, what, an unfortunate e-mail?

Mary Jo Pitzl:
Ties back to the debate about education. She's a republican from northwest Phoenix, got an email from a Sunnyslope high school freshman saying, why did you cut our budget? I looked at it; it was one unpunctuated string of sentences. Pretty well composed but didn't have any punctuation. And Senator Gray emailed her back and chastised her for her lack of punctuation and suggested she was not doing well in her education for all the money we put into it. Well it gets into the hands of the student's teacher who emailed the senator and chastised her and Senator Gray was immediately apologetic but it was out of the bag. It was on Daily Kos the liberal website and making the rounds with a lot of people.

Ted Simons:
This was a special needs student?

Mary Jo Pitzl:
That's unclear. We've been unable to contact the student. It may be that she's an English language learner and she was in a remedial English program. But the suggestion so far was that it's not a physical disability.

Ted Simons:
Is this another sign of the frustration going on down there?

Mary K. Reinhart:
The lawmakers, in their defense, they're buried with these kinds of emails and it's tempting to just go -- and response. Maybe a lesson to read it through and make sure you want to send.

Daniel Scarpinato:
Without getting too philosophical, maybe it's a lesson in whether or not you know who -- who the person is or if they're special needs or whatever. You know, it can be easy in electronic communication to take some of -- and I think she acknowledged that.

Mary Jo Pitzl:
Senator Gray was very apologetic and offered to have the student come and shadow her. And the student said why don't you come to my high school? She called a press conference to apologize again.

Ted Simons:
Before we go a word that the president will be speaking at Arizona State University spring commencement right here in River City. Is this another opportunity to try and swing the state blue?

Daniel Scarpinato:
He seems to pay attention to Arizona. Yeah, the interesting thing, I can't help thinking of every time he comes is how him getting elected has affected the state and taking Janet Napolitano with him and all of the dominoes that fell. And you think about in a parallel universe, if McCain had never said the fundamentals of the economy were strong, and Joe the Plumber had a little more effect in swing states, how life here would be different right now if Jan Brewer was still unknown to 70% of the population and Janet Napolitano was here without a stimulus package from Washington trying to negotiate with Republicans.

Ted Simons:
I don't know if you succeeded to get philosophical, but you got awfully complicated there. I think we managed to follow it through. We'll stop it right there and thank you for joining us on "Horizon."